Hong Kong-based Phoenix Property Investors is reported to have invested HK$442 million ($56.5 million) to purchase commercial space in the lower floors of the V Heun Building in Central, according to an account in local newspaper Mingpao.
The latest reported acquisition by the private equity real estate specialist comprises part of the ground floor and the entire first and second floors of the 21-story office block, and amounts to a combined area of 22,400 square feet (2,081 square metres).
The commercial property transaction would come as the world’s highest office rents continue to drive demand for space acquisitions in Hong Kong. Contacted by Mingtiandi, a Phoenix representative declined to comment.
Modern Beauty Boss Cashes in on Office Assets
At the published transaction value, Phoenix would be paying HK$442 million, or HK$19,700 ($2,520) per square foot for the property close to the Central-Mid-Levels escalator.
Phoenix is said to be purchasing the units in the 1982-vintage tower from Tsang Yu, chairperson of Hong Kong-listed beauty salon operator Modern Beauty, who bought the assets in 2012 for HK$260 million ($33.5 million). The deal generated a profit of HK$182 million ($23.3 million) for the salon boss.
The 21-storey tower is located at 138 Queen’s Road Central, across the street from the city’s most expensive office building The Center. The property sits at the midpoint between the Sheung Wan and Central metro stations, which are each a five-minute walk away.
Phoenix Goes Shopping After $322M Gain
Phoenix’ latest Central acquisition comes after the 16-year-old firm helmed by financiers Benjamin Lee and Samuel Chu brought in some $322 million from disposals in the second half of 2017, and as Hong Kong’s office market sees transaction activity continue to climb.
In November, Phoenix announced that it had sold five floors in an office project in Kowloon East to a mainland developer for $171 million, and that sale had been preceded by the firm selling a 5,798 square foot (539 square metre) commercial site in Wanchai district to Hong Kong-listed conglomerate Continental Holdings for $151.3 million.
Phoenix has holdings across Asia including Hong Kong, Japan, South Korea and Singapore, and according to its most recent financial statement, manages more than $7.6 billion in real estate assets.
Hong Kong’s entire office market seems to have picked up the pace in 2018, with five transactions of over HKD1.5 billion having been recorded so far this year, according to a recent note from property consultancy Colliers International. That sizzling January comes after the city witnessed a record HK$53 billion (US$6.8 billion) in office deals during the fourth quarter, according to the agency’s research. Boosted by CK Asset’s landmark $5.5 billion sale of the Center, that fourth quarter volume was up 408 percent compared to the previous three months.